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Quantitative Approaches to Fiscal Sustainability Analysis: A Case Study of Turkey since the Crisis of 2001

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  • Nina Budina
  • Sweder van Wijnbergen

Abstract

This case study of fiscal sustainability in Turkey after the crisis in 2001 reviews and extends quantitative approaches to fiscal sustainability analysis and brings them together in a user-friendly tool applicable in a data-sparse environment. It combines a dynamic simulations approach with a steady-state consistency approach. It also incorporates user-defined stress tests and stochastic simulations to deal with uncertainty. And it derives the future distribution of debt-output ratios, evaluating the fiscal adjustment required to stabilize them. Value at Risk analysis shows that considerable risks remain unless explicit feedback rules from debt surprises to the primary surplus are implemented. Copyright The Author 2008. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Nina Budina & Sweder van Wijnbergen, 2008. "Quantitative Approaches to Fiscal Sustainability Analysis: A Case Study of Turkey since the Crisis of 2001," World Bank Economic Review, World Bank Group, vol. 23(1), pages 119-140, November.
  • Handle: RePEc:oup:wbecrv:v:23:y:2008:i:1:p:119-140
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    File URL: http://hdl.handle.net/10.1093/wber/lhn011
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    References listed on IDEAS

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    Cited by:

    1. Jha, Shikha & Quising, Pilipinas & Camingue, Shiela, 2009. "Macroeconomic Uncertainties, Oil Subsidies, and Fiscal Sustainability in Asia," ADB Economics Working Paper Series 150, Asian Development Bank.
    2. Arjan M. Lejour & Jasper Lukkezen & Paul Veenendaal, 2011. "Sustainability of Government Debt in the EMU," Chapters,in: The Economic Crisis and European Integration, chapter 4 Edward Elgar Publishing.
    3. Hui, Hon Chung, 2013. "Fiscal sustainability in Malaysia: a re-examination," MPRA Paper 80018, University Library of Munich, Germany.
    4. Ko, Jun-Hyung & Morita, Hiroshi, 2015. "Fiscal sustainability and regime shifts in Japan," Economic Modelling, Elsevier, vol. 46(C), pages 364-375.
    5. Paret, Anne-Charlotte, 2017. "Debt sustainability in emerging market countries: Some policy guidelines from a fan-chart approach," Economic Modelling, Elsevier, vol. 63(C), pages 26-45.
    6. Jasper Lukkezen & Hugo Rojas-Romagosa, 2012. "When is debt sustainable?," CPB Discussion Paper 212, CPB Netherlands Bureau for Economic Policy Analysis.

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